Gates succeeded in raising $60,000 additional for the Pillsbury
Academy and was thereupon made head of the Baptist Education Society, which had a plan for establishing a big university in Chicago or New York.
Academy and was thereupon made head of the Baptist Education Society, which had a plan for establishing a big university in Chicago or New York.
Lundberg - The-Rich-and-the-Super-Rich-by-Ferdinand-Lundberg
" Nelson was chairman of Rockefeller Center before becoming governor of New York in 1958.
Winthrop heads his own Winrock Enterprises in Arkansas and participates in the fraternal enterprises; he was elected Republican governor of Arkansas in 1966.
A division of labor has been worked out by the quintet. John D. III is generally in charge of nonprofit or philanthropic enterprises, David of banking and finance, Laurance of new investments, Nelson (and, lately, Winthrop) of direct political participation (all are indirectly in politics through financial participation in the Republican Party) and Winthrop to some extent in his own orbit although he is a participant in all the fraternal enterprises and his brothers may, too, he participants in some of his ventures.
Winthrop, for special reasons associated with his development in the family constellation and his childhood relations to his older brothers appears to be the more independent of family patterns, at least in shading. Although each brother is sharply individualized, which a psychologist would expect in view of their order in the family, Winthrop appears to be the most noticeably different, more ambient. Both intra-family and later experience, including severe combat experience in World War II during which he rose from enlisted private to lieutenant colonel and won the Purple Heart and Bronze Star with oak leaf cluster, no doubt set him somewhat apart. Although all the brothers except Nelson served in the armed forces, Winthrop's experience was sufficiently unique, following and presaging a persistent pattern, so that among the Rockefellers he is a bit of an odd-man out. As such, he provokes a more spontaneous kind of publicity. Actually, all the Rockefellers are far more individualistic than even some close admirers credit them with being. On policies, their intimates report, they often differ and argue strongly back and forth at quarterly meetings. How differences are settled, by majority vote or otherwise, is not indicated. Which one, if any, is dominant in the group is as much a mystery as in the Russian Politburo.
It would require a rather long catalogue to detail all the projects, profit and nonprofit, with which they are associated. Morris lists thirty-six boards and committees of which John D. III was a member over a period of eighteen years and suggests that one multiply the list by five to ascertain how many such formal connections the brothers have, excluding their club memberships. Some of these are permanent connections, some temporary. The Rockefellers, because of past unpleasant experience with deputies (as in the Colorado Fuel and Iron Company strike of 1913), always involve themselves with all projects with which they are financially associated; and the mere business of attending rounds of meetings occupies much of their time and energy. They are working diplomats, or finpols, who aim to eliminate unfavorable public repercussions to the often commendable application of great power.
The Enterprises in Closer View
Their major enterprises are as follows:
Trust funds, at least seventy-five, managed by family nominees, invested in corporations, mainly in Standard Oil companies. Precisely what is in the trust funds, precisely how many there are or what they are worth in the aggregate is not publicly known. As trust funds are usually managed, there is shifting of holdings, perhaps only in the way of selling out at higher prices and buying back at lower. Whether there has been such shifting of Rockefeller holdings is not known. If the trustees were omniscient and in every market phase sold out at top prices and repossessed at market lows, never making an error, the funds would today be worth far more than anyone believes them to be. As nobody can pick market highs and lows with perfect prescience, theoretically maximum results can never be attained. What seems more certain is that the relative
value of the Rockefeller trusts has at least been preserved with respect to the performance of the economy. Whether they have outperformed the economy is not known, but it is a lively possibility considering the politically coddled oil industry.
A question of interest to a wide public is how the brothers stand with respect to control of the Standard Oil companies. The image projected by writers in the confidence of the family is that they are passive income-receivers, rentiers. Up to a point they may indeed be. But at any moment the massed family holdings can be mobilized into active dominance and control. This was shown cleanly in 1929 when a wayward chairman of the Standard Oil Company of Indiana, in which the Rockefellers were not active, took it into his head to seize control. The chairman was very popular with small stockholders, who had enjoyed unexpected extra dividends and the like. After rivalrous appeals to stockholders for proxies, at a special meeting the chairman was overwhelmingly voted out by the massed proxies of the Rockefeller family, philanthropic funds, family trust funds and nonfamily investment and trust funds. For investment managers throughout the world, after studying the issues, had decided to side with John D. Rockefeller, Jr. Mainly the small, purely dividend-oriented stockholders sided with the chairman. The Rockefellers held proxies for about 65 per cent of the stock when all the chips were down. A new management was installed. What was exemplified here was corporate power .
Who Controls the Corporations?
As there is a good deal of learned nonsense in circulation about who controls the corporations--nonsense placed into circulation by professors intent upon making a complex mountain out of a simple molehill--this is as good a place as any to dismiss the question. This nonsense was originally set in motion by Berle and Means in The Modern Corporation and Private Property (1932) and has since been embroidered upon by James Burnham in The Managerial Revolution, and others. Even such hard-bitten observers as the neo-Marxists Baran and Sweezy have to some extent been brought into the camp of those who believe corporations are dominated by managers, not by stockholders. 10
When all the chips are down, which is not always the case, the stockholders, particularly the big stockholders or trustees managing, big stockholdings, exercise broad control by determining the composition of the management. Basically, the stock controls. There are situations, however, where the generalized-ownership kind of influence Baran-Sweezy talk about comes into play.
Even with respect to small stockholders the formal power of the management is in any test restricted. Lindahl and Carter, in The Dartmouth Study, repeatedly point out, correctly, that the small stockholders have much legal power they do not use with respect to company policy. 11 Small stockholders are usually interested only in dividends, and as long as these keep flowing they are inert. But in many cases of record a single small stockholder has, by invoking the assistance of the courts, completely thwarted an established management, even a stockholding management. There is a great deal of law on the books on the side of the smallest stockholder. Most small stockholders feel they cannot take the time, trouble and expense to invoke this law; if they don't like the way the company is run they usually simply sell out, depressing the value of the stock to the chagrin of managers. They have an effect indirectly.
The big nonmanagerial stockholders hold the whip hand. So I believe it to be the case of the Rockefellers with respect to the Standard Oil empire, in which they are silent partners. If any issue arises with respect to which control needs to be asserted, they will unhesitatingly once again, as in the case of the Indiana company, assert that control.
This fact--or assumption--is unquestionably part of the thinking of every high Standard Oil official in the world.
Even though we don't know precisely the amount of stock the Rockefellers own in the Standard Oil companies, it is known what stock is owned by the Rockefeller Foundation, the Rockefeller Brothers Fund et al. This stock, too, has voting power, and the trustees include the Rockefellers. The voting power of these foundation stocks combines with the precisely undetermined stake of the family members to give a large, perhaps unexercised voice, in the determination of the company management. No company management is going to ride roughshod over or even politely ignore the interests merely of the foundation stock, formally a public possession. And so it is in other cases.
As I indicated, it is not known precisely what the participation of the Rockefellers is in the Standard Oil companies. When the master New Jersey company was ordered dissolved in 1911 it was separated into thirty-eight independent companies, and the stocks of thirty-three underlying subsidiaries as well as those of the parent companies were distributed pro rata to stockholders. The parent company then had outstanding 983,383 shares, of which John D. Rockefeller I owned 244,500 or almost 25 per cent, giving him working control. If this distribution had been maintained through the constituent companies the family would, clearly, now hold about 25 per cent evenly throughout the empire.
There is ample reason to believe, however, that this even ownership has not been maintained. First, the stocks in some companies appear to have been sold out, with more emphasis placed on other companies. Again, there has been distribution of assets on the philanthropic circuit, although where such distribution has been retained as principal the control power of the stock has remained in being, an important point.
During his later lifetime it was often reported that John D. Rockefeller, Jr. , owned 10 per cent of the Standard Oil Company of New Jersey, an enormous holding in itself in the largest industrial company in the world in point of assets; but this percentage, as it was often assumed, did not necessarily exhaust the family participation in the company.
While soon after dissolution the Rockefeller share of the constituents of the New Jersey company was valued in the market at around $900 million, subsequent price movements showed that this was a gross undervaluation. For in the market the stocks, and this prior to the automobile age, were steeply marked up in price. It took the dissolution of the trust to reveal to investors something of what this company was worth. It was the greatest profit-generating mechanism the world has ever to this day seen. It made General Motors even as of today look small because it included with the New Jersey company, which alone tops General Motors in assets in the industrial field, the present-day Indiana, California, Mobil, Marathon and many other big companies.
What happened to this 25 per cent Standard Oil interest is that it was subdivided among family members and family foundations for the most part. Taxes, either inheritance or gift, have had little impact, and as to income taxes far from all income of the companies has been paid out. It has been retained and reinvested.
So much for the trust funds, corporate control and the Rockefeller position in Standard Oil companies.
Venture Capitalists at Work
Rockefeller Brothers, Inc. , is the brothers' joint private investment company, into which they apparently put some of their income from Standard Oil sources, thus diversifying in an uncertain world. Its holdings are not reported. This enterprise, with Laurance as chairman, appears to concentrate in the area of modern advanced
technology. Laurance himself, for his personal account, has invested in technologically advanced growth-type companies; and writers such as Morris leave it ambiguous whether some of his investments at different times also included his brothers. Sometimes he clearly acts for the brothers together, sometimes apparently alone.
In the first five years of its life the brothers put less than $4 million into ventures of Rockefeller Brothers, Inc. , Morris reports, whereas their total investments of venture capital in that period came to $15 million. 12 The proclaimed intent of Rockefeller Brothers, Inc. , is "to achieve social and economic progress as well as a fair profit on investment. " 13 How much it is now worth does not appear on the record.
Laurance, the gadgeteer of the family, with ace flyer Eddy Rickenbacker in 1938 bought into North American Aviation, which was converted into Eastern Air Lines, a profitable venture. He then went into nonscoring Platt le Page, pioneer in building helicopters, and finally put in with the then limping J. S. McDonnell Aircraft Corporation, in which the brothers collectively after the war held 20 per cent of the stock on an original investment of $400,000 apart from any share Laurance antecedently held, put by Morris at an original modest $10,000. This company produced the advanced Phantom and Banshee jet fighters, which are thought to have enabled the United States to command the air in Korea in 1950-52 and which are still used in improved models. It is more recently deep in space-age technology. 14 But the Rockefellers, through their oil interests, were already an integral part of the front line of national offense-defense.
Other investments of the brothers were in Marquardt Aircraft Company of Los Angeles, manufacturer of ram-jet and pulse-jet engines and electronic air-navigation and control devices; the Laboratory for Electronics, Inc. , of Boston, makers of cyclotron equipment, radar components, electric flight control and guidance systems; Airborne Instruments Laboratory, radar and electronic devices and target indicators; the Aircraft Radio Corporation, radar and other electronic instruments; Horizons, Inc. , engineering development and research and (Laurance alone) $1 million as of 1952 in the Glenn L. Martin aircraft enterprise. 15
Laurance, too, held an interest in Reaction Motors (21 per cent), Marquardt Aircraft (20 per cent), Wallace Aviation (27 per cent), Flight Refueling (30 per cent), Piasecki Helicopter (17 per cent), Airborne Instruments (24 per cent), Aircraft Radio (24 per cent), New York Airways (3 per cent), Horizons (5 per cent), and Nuclear Development Associates (17 per cent). 16
Four out of five of these ventures, said Fortune, were successful. 17
While the Rockefeller brothers clearly have decided to put a good part of their personal investments into the field of advanced technology, which may seem to them the wave of the investment future, some clue to their broader investment approach may be discerned in the portfolio of the Rockefeller Brothers Fund.
At the end of 1964 we find there $20,689,425 by market value of government and corporate bonds, $21,882,161 of corporate notes, $1,801,589 of preferred stocks and $161,608,512 of common stocks with a book or acquisition value of $88,157,570. The entire Fund was valued at $205,981,687.
Although the portfolio embraced a wide section of the investment spectrum, like any balanced investment fund, distinctive Rockefeller properties among the holdings were as follows:
Value
Shares Book Value Market
Standard Oil Co. (New Jersey)
$61,665,328
Standard Oil Co. of California
17,927,934
Socony Mobil Oil Co
18,340,825
Marathon Oil Co. ,
a Standard Oil unit
1,996,800
Chase Manhattan Bank
12,203,264
684,220
244,333
199,900
31,200
167,168
$30,422,352
10,388,607
8,482,656
1,074,958
6,949,897
All these stocks, naturally, represent corporate voting power which, in conjunction with other family holdings, represent still greater voting power. Additional smaller holdings were in Alcoa, AT&T, Armour, Bethlehem Steel, Chrysler, Du Pont, Eastman Kodak, Ford Motor, General Electric, General Motors, Great A&P, IBM, International Nickel, International Paper, National Cash Register, Polaroid, Sears, Roebuck, Texaco, etc. As indicated by this Fund, then, the Rockefellers: are diversified by investment throughout the American corporate structure.
Their private holdings presumably follow the same general line of distribution, although there may be differences of emphasis in different funds.
More recently at least, Laurance has had a large position in the Itek Corporation, formed in 1960 to concern itself with mechanical, electrical and electronic equipment and to develop optics with relation to photography and photocopying.
Some of these personal investments have been closed out. Where there has been a profit, the close-out required a capital gains tax of 25 per cent. These capital gains ventures of the Rockefellers are, in my opinion, on the basis of the theory of giving tax leniency to actual new ventures, fully justified and differ from capital gains leniency accorded buyers and sellers of stock and real estate in the open market, where there is not the shadow of any social contribution. Whether the brothers operate cyclically in the stock market, as their grandfather did over a broad spectrum, is not known, although the family Stock Exchange seat is still held.
The brothers, Morris reports, are "keenly interested" in making money but not by any means for the sake of mere possession or accumulation, only of "proving their ability. " 18 To them, he says, money is a mere tool with which to build. They don't like to talk about money, which by reason of constant allusion in their presence must surely be boring, but will redirect pecuniary conversations to value. Unlike lesser mortals they are in a position where they can do this on the basis of authentic impulse. Their biggest problem about money is no doubt that they have had dumped in their laps so much of what most other people desire.
Contrapuntal Enterprises
The Rockefeller Brothers Fund is a foundation enterprise run by the brothers and the largest in a flotilla of others including the General Education Board, the Rockefeller Foundation, the Laura Spelman Rockefeller Memorial and the like. Out of the General Education Board were financed the University of Chicago and many other educational enterprises in whole or in part, including many southern Negro colleges. The Rockefeller Foundation has been more broadly engaged in financing medical, scientific, cultural and other enterprises in vast profusion, a work the Rockefeller Brothers Fund is continuing.
There is, quite evidently, a counterpoint going far back into the history of John D. I between profit-making enterprises, originally subject to much public and judicial disapproval, and nonprofit-making enterprises that have earned wide public approval.
Anyone who does not like the way Rockefeller conducted his business affairs is, upon inquiring into his nonprofit or philanthropic enterprises, brought up short. Here the signals become crossed, as in the case of Pavlov's experiments with dogs. Original feelings of pain or disapproval are now followed by feelings of pleasure and approval. Then, as one sits back to enjoy the pleasure, one suddenly again feels a stab of pain. Observers are confused, perhaps like the Pavlovian dogs brought to a state of nervous breakdown or apathy.
There is room a-plenty here for feelings of ambivalence. Are the Rockefellers trying to improve the world? Or are they merely automatically milking it?
These questions, which reflect the Rockefellers as controversial figures, require some sort of answer. There are many persons who would blandly and patronizingly dismiss such thoughts as the product of a presumptuous writer's overheated imagination. If there were nothing to the negative side then, one should ask, why did Winthrop, who never hurt a fly, when he went to work in the Texas oil fields in 1933 find it necessary to have bodyguards and, when he returned in 1936, to get a permit to carry a gun for protection against "fanatics"? 19
Point Counter Point
The contrapuntal Rockefeller style of operation is shown by the more recent enterprise of the brothers in the international field, especially in Latin America and the Middle East but also, of all places, in Russia. Two organizations, Morris reports, were established by them as an "experiment in international cooperation. " One was the International Basic Economy Corporation (IBEC), originally started with $2 million in 1947 and soon capitalized at $10,824,000, "intended to help raise the standard of living in the localities involved--chiefly Latin America--and to return a profit, if possible, to the investors. " 20
Paralleling IBEC there was formed the American International Association for Economic and Social Development (AIA), with Nelson president of both at the inception. Because IBEC would be operating its profit enterprises in poor if not primitive areas, AIA would engage in providing health, education, research and credit facilities. AIA was nonprofit, Operations were begun in Brazil and Venezuela and later extended to other areas.
AIA put up Rockefeller funds but, following a settled Rockefeller policy, it involved others as well--at first various Venezuelan oil companies and the Corn Products Refining Company and later Pfizer Corporation do Brasil; Anderson, Clayton, Ltda; The Sulphur Institute; The Ford Foundation; and Price Waterhouse and Company. Then it called upon local governments to put up matching funds.
Since Morris reported on these enterprises they have grown, particularly in the profit area. IBEC as of 1965 had 9 plants in the United States and 135 stores in Latin America and 108 wholly or partially owned subsidiaries in various parts of the world. It had 297 common and 32 preferred stockholders and 10,090 employees. Its business included housing, retailing, credit and many other endeavors. Total assets at the end of 1965 were $142,227,662 and total sales $191,711,425. Profits for 1965 were $2,723,007. The president was R. S. Aldrich and one of the vice presidents was Rodman C. Rockefeller, Nelson's son. 21 This has manifestly become a big operation.
AIA in 1961 had total assets of $752,585, received gifts of $908,207 for the year and expended $937,444. 22
Early in 1967 it was announced (New York Times, January 16, 1967; 1:6-7) that IBEC was entering Russia and the Iron Curtain countries in a multi-billion-dollar operation. Joining 50-50 with Tower International, Inc. , of the Cleveland Cyrus Eaton interests, it
was announced that the joint enterprise would begin or complete already launched large hotels in Budapest, Belgrade, Warsaw, Prague, Sofia and Bucharest in a Rockefeller- Eaton version of an Iron Curtain Hilton chain. Also to be built were rubber plants in Russia costing considerably more than $200 million, a $50-million aluminum plant in Yugoslavia and a glass plant in Rumania. Highly profitable arrangements were announced to have been made in return for American financing and construction knowhow and can-do; materials, labor and sites would be supplied by the. Communist governments.
The entire deal was looked upon by the principals as the beginning of a highly useful "dialogue" between the capitalist West and the communist East, a really constructive thrust that can bring salvation to the ordinary run of mortals and, naturally, plenty of dollars to the promoters. Considering the stature of all the participants it was hard to see how the whole enterprise could fail to be a huge success.
These two ventures in the private development (exploitation? ) of undeveloped world regions show the general emphasis. The tax-free AIA clears the way; IBEC earns the profits. The profits of IBEC more than nourish AIA. All spells "development," international fraternization.
Almost from the very beginning the Rockefellers have followed a policy, wherever they could, of requiring that others be brought in with matching funds. In this way they have succeeded in involving a broader section of the community of wealth in any particular nonprofit enterprise.
Thus, when John D. Rockefeller put up the money to get the University of Chicago started, Marshall Field I, the department-store tycoon, was prevailed upon to provide the land, and many rich Chicagoans--Armours, Swifts, Fields and others--have from time to time contributed funds to the university. In this way the Rockefellers have been, to a large extent, bellwethers or pilots in the field of philanthropolity.
Before World War I, after Andrew Carnegie financed Abraham Flexner in a study of the medical schools that led to profound valuable reforms and the elimination of a large number of shabby diploma mills, it was decided to give the University of Rochester a medical school. Flexner approached George Eastman, the Rochester camera magnate, and explained that the cost would be $10 million. Eastman offered to put up $2. 5 million, which Flexner found inadequate. Eastman then sent word that he would put up $3. 5 million, to which Flexner is said to have replied: "That would make it a Rockefeller school, not yours. It must be yours. " Over this Eastman brooded for a few weeks and then called in Flexner, shaking his finger and shouting: "I'll put up five million--then I don't want ever to see your face again! " 23
Enter Frederick T. Gates
In this and many other instances the way was by no means smooth in cooperative money-raising. Nevertheless, this pattern of the Rockefellers, originally devised by Rockefeller's close adviser, Frederick T. Gates, head of the American Baptist Education Society, has been rather faithfully adhered to throughout. They try to put up no more than half the funds for any project.
How Rockefeller became acquainted with Gates, why he decided to make him his philanthropolic adviser, is a revealing story. Gates, a clergyman stationed in Minneapolis, was called upon by George A. Pillsbury, the flour king, to help draw up his will, by which he intended to leave several hundred thousand dollars to a Baptist school. Pillsbury decided to give immediately only $50,000 and leave them to raise a like amount, thus insuring their close supervision of the money. Then he would leave an amount in his will.
Gates succeeded in raising $60,000 additional for the Pillsbury
Academy and was thereupon made head of the Baptist Education Society, which had a plan for establishing a big university in Chicago or New York. In this guise he approached Rockefeller, a Baptist official, who invited him to pass a weekend with him, during which Gates did little talking.
The oil man became interested in him [says Morris] especially when he learned that Gates was acquainted with the Merritt family in Minneapolis which owned the vast Mesabi Range iron ore deposits. John D. knew that if he could buy Mesabi Range and develop it under the techniques he had developed in the oil business he could become the master of American steel and iron. Furthermore, the Merritts needed money.
Not long afterward Gates was instrumental in getting a large loan for the Merritts, who pledged the key railroad into the iron field as security. It was Rockefeller money, although the Merritts didn't know it, and in time John D. had the railroad, and forced the Merritt family to sell out to him at his own price. The steel men immediately took alarm when they saw the Mesabi Range fall into Rockefeller hands, but John D. apparently did not want a knockdown fight and he later leased the deposit to Carnegie for fifty years. 24
The Multifacet Style
This was back in the late 1880's and early 1890's. The way Rockefeller scooped up Gates and the ultra-juicy Mesabi Range and started planning for the University of Chicago well illustrates the Rockefeller and the higher finpolitan style. This style is multifaceted.
The essence of a finpolitan project is that it be multifaceted, that it have aspects of profound profitability interlaced with do-gooding, philanthropy and favorable publicity. It must seem constructive, statesmanlike. The philanthropic thrust qualifies and protects the profit-making thrust. For this reason, almost any Rockefeller or emulatory higher finpolitan endeavor is very much like a rich four-decker sandwich: One layer is Big Business, the next layer is obviously vaguely philanthropic or cultural-scientific, the third layer represents favorable notoriety stemming both from profitability and from philanthropy and the fourth layer and the first three layers in combination represent cultural, social, political and economic power. It all adds up to power.
In the case of the Rockefellers as of others of the wealthy, there are plenty of persons ready to dispute such suggestions. Thus, Professor Nevins, writing of the elder Rockefeller, says: "Unlike James B. Duke, he never for a moment mingled private commercial interests with philanthropic acts. " 25 1 have no interest whatever in asserting that Rockefeller did or did not mingle commercial and philanthropic acts; what is at stake is simple intellectual clarity with respect to facts. On the basis of abundant evidence that Nevins himself is obliged to scan, Rockefeller did mingle profit and nonprofit activities; it would have been difficult if not impossible to avoid doing so.
The chief instrumentality of this mingling was Gates himself.
As Gates has written, owing to public reports coming out about his great wealth, Rockefeller at the time began to be "hounded almost like a wild animal" by people soliciting funds for plausible and implausible causes. Many simply wanted personal handouts. 26 From this pressure he wanted to escape, and Gates, now in Rockefeller's employ, was the man to whom solicitors were sent for screening.
"It has been customary to treat Gates as a minister who developed an interest in education and philanthropy," says Nevins. "Actually, Gates was essentially a businessman with a talent for large affairs, a keen interest in the power of money, and a passion for seeing it expended with the greatest possible efficiency. He was, in short, a man after Rockefeller's own heart . . . he was also shrewd, alert, aggressive, and capable
of driving hard bargains. The time was not far distant when this former minister, coming to New York, would teach Wall Street itself some lessons. " 27
Subsequently Nevins notes, "The man whom Rockefeller thus selected as his principal aide in philanthropy was as remarkable as any of his partners in business. In sheer ability he matched Flagler, Rogers, and perhaps even Archbold . . . he possessed an unusual combination of gifts: insight, genuine imagination, analytical power, and vision, backed by unquenchable energy, courage, and an evangelistic fervor. . . . He was often impulsive and sometimes inconsistent. . . . At bottom, as we have said, he was a businessman rather than a minister or social worker, and he soon gained a reputation for cautious, adroit, and hard-headed conduct in business affairs. " 28
Gates, like many an underling, was as flinty as his master. At the time of the strike at the Colorado Fuel and Iron Company in 1913 (twenty-seven dead and two mines set on fire by desperate workers), Gates stood firmly against the strikers as Rockefeller, Jr. , relented. Both had been directors of the company of which John D. Rockefeller was II a major stockholder" (Fosdick); and L. M. Bowers, the chairman, was the uncle of Gates.
Characterizing the strikers as "desperate and lawless," waging "organized and deliberate war on society," Gates said, "The officers of the Colorado Fuel and Iron Company are standing between the country and chaos, anarchy, proscription and confiscation, and in so doing are worthy of the support of every man who loves his country. " 29 Actually, the strikers had been maddened with ill treatment. According to John T. Flynn, a biographer who presents a less genteel Rockefeller than Nevins, "When Henry C. Frick shocked the country by shooting down ruthlessly the striking iron workers at Homestead, John D. Rockefeller wrote him a letter approving his course and expressing sympathy. " 30 Gates and the elder Rockefeller saw pretty much eye to eye.
So talented did Rockefeller quickly find Gates that "Inevitably, Gates was soon looking after Rockefeller's investments as well as his philanthropies. " 31
Although the Standard Oil Trust absorbed all of Rockefeller's time and energy, he had nevertheless already made extensive diversified investments--in mines, steel mills, paper mills, a nail factory, railroads, lumbering, smelting properties and the like. 32 On some of these he had been stuck, through bad advice; others were not being operated properly. Gates was sent on tours of the country to look into the properties underlying the entire investment portfolio. He reported back to Rockefeller on what he found, not always favorably. Then he was given carte blanche to reorganize, revise and to bring order out of chaos.
Gates stepped into a dual role as the first director of the Rockefeller philanthropic activities and as investment manager, and he was equally good in both roles. 33
Beyond this the clergyman-humanitarian became a rabid and successful Wall Street speculator for his own account and an officer of various Rockefeller companies, notably the head of the Lake Superior Iron Ore Company. "Nothing could be stranger than the spectacle of this impecunious Baptist preacher setting out to raise funds for a religious college and winding up in a few years as the president of an iron mine and ore railroad company worth twenty millions, and finally the almoner of America's greatest multimillionaire, with the power of the purse over these vast treasures. " 34
For his role in negotiating the sale of Rockefeller ore properties to the embryo United States Steel Corporation, Gates resolutely demanded and received a commission from Rockefeller. 35 Gates had some idea of his worth in cash value.
Such being the case, the meaning of a statement is baffling when it indicates that Rockefeller never mingled philanthropy and business. There was such mingling in still
further degree when he established endowments with Standard Oil stock, all of which carried company voting power.
What became the "Rockefeller style," then, was apparently not something reasoned out in advance. Gates and Rockefeller played everything "by ear," and the style slowly evolved. But from the moment Gates joined Rockefeller formally in 1891, both the philanthropies and the satellite investments were carefully thought about and supervised by Gates while Rockefeller tuned Standard Oil up to concert pitch. In the course of time the contrapuntal role of Gates took Standard Oil into its sweep and is well exemplified today in IBEC, AIA and other new Rockefeller enterprises.
Division of World Emphasis
Just as the brothers have evolved a division of labor among types of activities so, too, have they evidently (perhaps unconsciously) divided the world into spheres of individual influence. Latin America, where Nelson has a Venezuelan ranch, appears to be his particular domain; his son, thus, is a high official of IBEC. The Orient is the particular domain of John D. III. All . areas are under the supervision of David as the head of a bank with more than 200 world branches. Laurance seems pointed toward Africa. 'Only Europe does not yet seem spoken for.
The chief chairmanships and directorships show the special orientations of interest.
John D. 111, chairman of the Rockefeller Foundation, the General Education Board, the national council of the United Negro College Fund, was also as of 1966 a trustee of Princeton University, Harvard-Yenching Institute and chairman of Products of Asia, Inc. , Products of India, Inc. , and president of the Japan Society, Inc. , and the Asia Society, Inc. He was a lieutenant commander in the United States Naval Reserve during World War 11, special assistant to the under secretary of the Navy late in 1945, and
was a consultant of the Dulles Mission to Japan on the peace settlement in 1951 and a U. S. delegate to the Japanese peace treaty conference in San Francisco in 1951. He holds the following decorations: Order of Auspicious Star of China (Kuomintang), Order of the British Empire, Grand Cordon of the Order of the Sacred Treasure of Japan, Grand Cordon of the Star of Ethiopia, Most Exalted Order of the White Elephant of Thailand and Commander of the Ordre des Millions d'Elephants et du Parasol Blanc of Laos.
Now, whatever else this worthy man is, taking into consideration many other directorships, trusteeships and chairmanships, he is more than an ordinary citizen with one vote at the polls. He is, also, manifestly more than a wealthy man. He is a finpol, intermeshing between governments, industries and cultural institutions.
"Because of their many friendships with missionaries, the Rockefellers had [as early as 1914] taken a keen interest in China," says Nevins. 36 There were others who churlishly believed the keen interest of the pecuniary wizard of Standard Oil related more to the fact that China was a huge market outlet for kerosene, of which Standard was then almost the sole supplier.
The Rockefellers were, at any rate, keenly interested in China, as they are now, without missionaries, interested in all of the Orient from Japan to India, where Standard Oil at least incidentally has large interests, and the General Education Board put up money to establish the China Medical Board and to build Peking Union Medical College. Up to 1952, Nevins says, the Foundation had put some $45 million into westernizing Chinese medicine, science and education. More recently, as the Communists took over China, the Rockefellers shifted Asiatic emphasis to Japan, India and other areas.
Nelson Rockefeller, three-time governor of New York, premier state of the Union, was president of Rockefeller Center from 1938 to 1945 and chairman from 1945 to 1953 and 1956 to 1958; Federal Coordinator of International American Affairs, 1940- 44; Assistant Secretary of State, 1944-45; chairman of the International Development Advisory Board (Point Four), 1950-51; Special Assistant to the President of the United States, 1954-55; Under-Secretary of Health, Education and Welfare (HEW), 1953-54 and has at various times (when not helping run the government) been or remains director or trustee of various foundations, museums and organizations. A Phi Beta Kappan, he holds the Order of Merit of Chile, the National Order of the Southern Cross of Brazil and the Order of the Aztec Eagle of Mexico. Here, again, is no common person, no ordinary wealthy man, no run-of-the-mill politician. This is a finpol, a very wealthy man with an interlacing of high governmental and cultural points d'appui.
David Rockefeller, chairman of The Chase Manhattan Bank, worked his way quickly up through various jobs in the bank and is also chairman of The Chase International Investment Corporation, chairman of Morningside Heights, Inc. , a big housing development, and a director of B. F. Goodrich Company, Rockefeller Brothers, Inc. , and the vast Equitable Life Assurance Society. He was an army captain in World War II, is a director and trustee of various Rockefeller foundations and museums, and is an overseer of Harvard University, of which he is an alumnus. He holds a Ph. D. from the University of Chicago. He also holds the French Legion of Honor and the Legion of Merit. In 1940 he published Unused Resources and Economic Waste. Here again is a high personage, far from an ordinary citizen.
Laurance Rockefeller is a similar type of Higher Organization Man. He is chairman of Rockefeller Brothers, Inc. , Caneel Bay Plantation, Inc. , Rockefeller Center, Inc. , and director of Filatures et Tissages Africains (Africa and the Caribbean are apparently his particular domains), Cape of Good Hope Corporation, Dorado Beach Hotel Corporation, president and trustee of Rockefeller Brothers Fund and trustee of the Conservation Foundation, chairman of the New York State Council of Parks, member of the corporation of Massachusetts Institute of Technology, a trustee of the YWCA, director of the American Committee of International Wildlife Protection, director of Resources of the Future, director of the American Planning and Civic Association and of the Hudson River Conservation Society, commissioner and vice president of the Palisades Interstate Park Commission, trustee and president of Jackson Hole Preserve, Inc. , trustee of the Alfred P. Sloan Foundation, chairman of the Memorial Sloan- Kettering Cancer Center, trustee and vice president of Sealantic Fund, trustee and president of the American Conservation Association, trustee and vice president of the New York Zoological Society and director, trustee or officer of various other bodies. He is a Commandeur de L'Ordre Royal du Lion, Belgium, recipient of the Conservation Service award of the U. S. Department of Agriculture and of its Special Conservation award and a holder of the Horace Marder Albright Scenic Preservation medal. A lieutenant commander during World War II, he is a member of the Naval Air Reserve.
Winthrop trails somewhat in this august procession but is coming abreast fast via politics. Governor of Arkansas, he is also chairman of IBEC Housing Corporation and Winrock Enterprises, Inc. , conducting vast agricultural and cattle-raising enterprises in Arkansas; a director of the Union National Bank of Little Rock, Rockefeller Brothers, Inc. , and Rockefeller Center, Inc. ; a trustee of Industrial Relations Counsellors; chairman of the board of Colonial Williamsburg, Inc. , and Williamsburg Restoration, Inc. ; chairman of the Arkansas Industrial Development Commission; trustee of the National Urban League, Rockefeller Brothers Fund and the National Fund for Medical Education. Since 1953 he has resided in Arkansas.
Among them all they cover a great deal of ground. As anyone can see, they are community-minded, but on an international scale that gives this term a new dimension. The world is their plantation.
The Foundation Thrust
Total outlays for philanthropic or nonprofit enterprises by the founder of Standard Oil are put by Raymond B. Fosdick at $446,719,371. 22 capital sum and income therefrom of $850 million--in all well over a billion dollars. 37 Most of the income was expended in the form of grants, except in the case of Rockefeller Institute.
The capital sums were allocated as follows:
Rockefeller Institute for Medical Research, 1902
(now Rockefeller University)
General Education Board, 1902
The Rockefeller Foundation, 1913
Laura Spelman Rockefeller Memorial, 1918-28
Total
$ 60,673,409. 45
129,209,167. 10
182,851,480. 90
73,985,313. 77
$446,719,371. 22
In recent years the capital funds of the General Education Board have been drawn down steeply for grants in the neglected field of education and the Laura Spelman Rockefeller Memorial was merged in 1928 with the Foundation. Funds for the University of Chicago came largely through the General Education Board. Coming up in place of the General Education Board has been the Rockefeller Brothers Fund.
Up to 1950 external grants by income and principal were as follows: 38
Rockefeller Foundation
From income
From principal
Total
General Education Board
From income
From principal
$325,754,751. 35
$125,773,613. 93
$451,528,365. 28
$132,339,912. 86
$164,427,148. 34
Total
Laura Spelman Rockefeller Memorial
From income
From principal
Total
International Education Board
From income
From principal
Total
$296,767,061. 20
$ 27,839,809. 74
$ 27,500,000. 00
$ 55,339,809. 74
$ 6,495,807. 82
$ 11,837,482. 00
$ 18,333,289. 82
$821,968,526. 04*
Grand Total
*Here should be added $60,673,409. 45 for Rockefeller University.
The International Education Board was established by John D. Rockefeller, Jr. , in 1923 but, in a very real sense, all the Rockefeller moneys are derived from the founder because nobody in the family since him has been a fortune-builder or even a conspicuous moneymaker. The grandsons have enterprises under way that appear likely to become highly profitable but not on any scale, as far as appears to date, resembling the original Standard Oil, the real honey-pie.
What remained of these funds at the end of 1950 was as follows:
Rockefeller Foundation $158,103,332. 13 39
General Education Board $ 24,624,493. 01 40
Rockefeller Brothers Fund (as of 1955) $ 59,663,273. 62 41
Total $242,391,098. 76
Of the moneys in the Rockefeller Brothers Fund the late John D. Rockefeller, Jr. , contributed $58 million in 1951 and bequeathed to it half of his estate. Reflecting part of this bequest in the amount of $65 million, at the end of 1960 the Fund showed total assets of $116,173,369. 42 Appreciation since then, as already shown, has been great.
Since 1950, of course, these funds have been generating more income, most of which has been allocated in the form of grants.
It is clear, then, that a truly stupendous sum was directed from the fortune of a single individual into various medical, educational, scientific and general cultural projects, both in the United States and abroad. As most of these moneys consisted of dollars of much greater purchasing power than the present dollar, it is evident that in dollars of current value the disbursements were of far greater weight.
That all this was part of a far-reaching plan is denied by spokesmen for the family such as Professor Nevins and Raymond B. Fosdick. To the charge of critics that the benefactions were established as "a shield against public censure," or, as some charged, "conscience money," Fosdick, following Nevins, points out that Rockefeller in his 'teens, as a pious Baptist, was already giving to the church as much as 6 per cent of his earnings. He kept a meticulous record down through the years of all such gifts, which amounted to more than $1,000 annually by 1865 and to nearly $6,000 by 1869--goodly sums in those days. He gave $558. 42 in a lump to Denison University, for example, in the late 1860's. 43
Rockefeller, in other words, gave money all along, even as he saved and acquired it, and, as it appears in the Fosdick-Nevins accounts, merely stepped up the rate when he became very wealthy. Yet, that there was more to it than a mere continuation of charitable giving, is shown when these writers quote Gates.
Mr. Rockefeller, a prudent man, apparently showed some doubt at first about proposals of large-scale largesse, if such it was. Says Fosdick:
"Mr. Gates, who could never be anything but candid and forthright, used to thunder at the elder Rockefeller, 'Your fortune is rolling up, rolling up like an avalanche! You must keep up with it! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children's children.
A division of labor has been worked out by the quintet. John D. III is generally in charge of nonprofit or philanthropic enterprises, David of banking and finance, Laurance of new investments, Nelson (and, lately, Winthrop) of direct political participation (all are indirectly in politics through financial participation in the Republican Party) and Winthrop to some extent in his own orbit although he is a participant in all the fraternal enterprises and his brothers may, too, he participants in some of his ventures.
Winthrop, for special reasons associated with his development in the family constellation and his childhood relations to his older brothers appears to be the more independent of family patterns, at least in shading. Although each brother is sharply individualized, which a psychologist would expect in view of their order in the family, Winthrop appears to be the most noticeably different, more ambient. Both intra-family and later experience, including severe combat experience in World War II during which he rose from enlisted private to lieutenant colonel and won the Purple Heart and Bronze Star with oak leaf cluster, no doubt set him somewhat apart. Although all the brothers except Nelson served in the armed forces, Winthrop's experience was sufficiently unique, following and presaging a persistent pattern, so that among the Rockefellers he is a bit of an odd-man out. As such, he provokes a more spontaneous kind of publicity. Actually, all the Rockefellers are far more individualistic than even some close admirers credit them with being. On policies, their intimates report, they often differ and argue strongly back and forth at quarterly meetings. How differences are settled, by majority vote or otherwise, is not indicated. Which one, if any, is dominant in the group is as much a mystery as in the Russian Politburo.
It would require a rather long catalogue to detail all the projects, profit and nonprofit, with which they are associated. Morris lists thirty-six boards and committees of which John D. III was a member over a period of eighteen years and suggests that one multiply the list by five to ascertain how many such formal connections the brothers have, excluding their club memberships. Some of these are permanent connections, some temporary. The Rockefellers, because of past unpleasant experience with deputies (as in the Colorado Fuel and Iron Company strike of 1913), always involve themselves with all projects with which they are financially associated; and the mere business of attending rounds of meetings occupies much of their time and energy. They are working diplomats, or finpols, who aim to eliminate unfavorable public repercussions to the often commendable application of great power.
The Enterprises in Closer View
Their major enterprises are as follows:
Trust funds, at least seventy-five, managed by family nominees, invested in corporations, mainly in Standard Oil companies. Precisely what is in the trust funds, precisely how many there are or what they are worth in the aggregate is not publicly known. As trust funds are usually managed, there is shifting of holdings, perhaps only in the way of selling out at higher prices and buying back at lower. Whether there has been such shifting of Rockefeller holdings is not known. If the trustees were omniscient and in every market phase sold out at top prices and repossessed at market lows, never making an error, the funds would today be worth far more than anyone believes them to be. As nobody can pick market highs and lows with perfect prescience, theoretically maximum results can never be attained. What seems more certain is that the relative
value of the Rockefeller trusts has at least been preserved with respect to the performance of the economy. Whether they have outperformed the economy is not known, but it is a lively possibility considering the politically coddled oil industry.
A question of interest to a wide public is how the brothers stand with respect to control of the Standard Oil companies. The image projected by writers in the confidence of the family is that they are passive income-receivers, rentiers. Up to a point they may indeed be. But at any moment the massed family holdings can be mobilized into active dominance and control. This was shown cleanly in 1929 when a wayward chairman of the Standard Oil Company of Indiana, in which the Rockefellers were not active, took it into his head to seize control. The chairman was very popular with small stockholders, who had enjoyed unexpected extra dividends and the like. After rivalrous appeals to stockholders for proxies, at a special meeting the chairman was overwhelmingly voted out by the massed proxies of the Rockefeller family, philanthropic funds, family trust funds and nonfamily investment and trust funds. For investment managers throughout the world, after studying the issues, had decided to side with John D. Rockefeller, Jr. Mainly the small, purely dividend-oriented stockholders sided with the chairman. The Rockefellers held proxies for about 65 per cent of the stock when all the chips were down. A new management was installed. What was exemplified here was corporate power .
Who Controls the Corporations?
As there is a good deal of learned nonsense in circulation about who controls the corporations--nonsense placed into circulation by professors intent upon making a complex mountain out of a simple molehill--this is as good a place as any to dismiss the question. This nonsense was originally set in motion by Berle and Means in The Modern Corporation and Private Property (1932) and has since been embroidered upon by James Burnham in The Managerial Revolution, and others. Even such hard-bitten observers as the neo-Marxists Baran and Sweezy have to some extent been brought into the camp of those who believe corporations are dominated by managers, not by stockholders. 10
When all the chips are down, which is not always the case, the stockholders, particularly the big stockholders or trustees managing, big stockholdings, exercise broad control by determining the composition of the management. Basically, the stock controls. There are situations, however, where the generalized-ownership kind of influence Baran-Sweezy talk about comes into play.
Even with respect to small stockholders the formal power of the management is in any test restricted. Lindahl and Carter, in The Dartmouth Study, repeatedly point out, correctly, that the small stockholders have much legal power they do not use with respect to company policy. 11 Small stockholders are usually interested only in dividends, and as long as these keep flowing they are inert. But in many cases of record a single small stockholder has, by invoking the assistance of the courts, completely thwarted an established management, even a stockholding management. There is a great deal of law on the books on the side of the smallest stockholder. Most small stockholders feel they cannot take the time, trouble and expense to invoke this law; if they don't like the way the company is run they usually simply sell out, depressing the value of the stock to the chagrin of managers. They have an effect indirectly.
The big nonmanagerial stockholders hold the whip hand. So I believe it to be the case of the Rockefellers with respect to the Standard Oil empire, in which they are silent partners. If any issue arises with respect to which control needs to be asserted, they will unhesitatingly once again, as in the case of the Indiana company, assert that control.
This fact--or assumption--is unquestionably part of the thinking of every high Standard Oil official in the world.
Even though we don't know precisely the amount of stock the Rockefellers own in the Standard Oil companies, it is known what stock is owned by the Rockefeller Foundation, the Rockefeller Brothers Fund et al. This stock, too, has voting power, and the trustees include the Rockefellers. The voting power of these foundation stocks combines with the precisely undetermined stake of the family members to give a large, perhaps unexercised voice, in the determination of the company management. No company management is going to ride roughshod over or even politely ignore the interests merely of the foundation stock, formally a public possession. And so it is in other cases.
As I indicated, it is not known precisely what the participation of the Rockefellers is in the Standard Oil companies. When the master New Jersey company was ordered dissolved in 1911 it was separated into thirty-eight independent companies, and the stocks of thirty-three underlying subsidiaries as well as those of the parent companies were distributed pro rata to stockholders. The parent company then had outstanding 983,383 shares, of which John D. Rockefeller I owned 244,500 or almost 25 per cent, giving him working control. If this distribution had been maintained through the constituent companies the family would, clearly, now hold about 25 per cent evenly throughout the empire.
There is ample reason to believe, however, that this even ownership has not been maintained. First, the stocks in some companies appear to have been sold out, with more emphasis placed on other companies. Again, there has been distribution of assets on the philanthropic circuit, although where such distribution has been retained as principal the control power of the stock has remained in being, an important point.
During his later lifetime it was often reported that John D. Rockefeller, Jr. , owned 10 per cent of the Standard Oil Company of New Jersey, an enormous holding in itself in the largest industrial company in the world in point of assets; but this percentage, as it was often assumed, did not necessarily exhaust the family participation in the company.
While soon after dissolution the Rockefeller share of the constituents of the New Jersey company was valued in the market at around $900 million, subsequent price movements showed that this was a gross undervaluation. For in the market the stocks, and this prior to the automobile age, were steeply marked up in price. It took the dissolution of the trust to reveal to investors something of what this company was worth. It was the greatest profit-generating mechanism the world has ever to this day seen. It made General Motors even as of today look small because it included with the New Jersey company, which alone tops General Motors in assets in the industrial field, the present-day Indiana, California, Mobil, Marathon and many other big companies.
What happened to this 25 per cent Standard Oil interest is that it was subdivided among family members and family foundations for the most part. Taxes, either inheritance or gift, have had little impact, and as to income taxes far from all income of the companies has been paid out. It has been retained and reinvested.
So much for the trust funds, corporate control and the Rockefeller position in Standard Oil companies.
Venture Capitalists at Work
Rockefeller Brothers, Inc. , is the brothers' joint private investment company, into which they apparently put some of their income from Standard Oil sources, thus diversifying in an uncertain world. Its holdings are not reported. This enterprise, with Laurance as chairman, appears to concentrate in the area of modern advanced
technology. Laurance himself, for his personal account, has invested in technologically advanced growth-type companies; and writers such as Morris leave it ambiguous whether some of his investments at different times also included his brothers. Sometimes he clearly acts for the brothers together, sometimes apparently alone.
In the first five years of its life the brothers put less than $4 million into ventures of Rockefeller Brothers, Inc. , Morris reports, whereas their total investments of venture capital in that period came to $15 million. 12 The proclaimed intent of Rockefeller Brothers, Inc. , is "to achieve social and economic progress as well as a fair profit on investment. " 13 How much it is now worth does not appear on the record.
Laurance, the gadgeteer of the family, with ace flyer Eddy Rickenbacker in 1938 bought into North American Aviation, which was converted into Eastern Air Lines, a profitable venture. He then went into nonscoring Platt le Page, pioneer in building helicopters, and finally put in with the then limping J. S. McDonnell Aircraft Corporation, in which the brothers collectively after the war held 20 per cent of the stock on an original investment of $400,000 apart from any share Laurance antecedently held, put by Morris at an original modest $10,000. This company produced the advanced Phantom and Banshee jet fighters, which are thought to have enabled the United States to command the air in Korea in 1950-52 and which are still used in improved models. It is more recently deep in space-age technology. 14 But the Rockefellers, through their oil interests, were already an integral part of the front line of national offense-defense.
Other investments of the brothers were in Marquardt Aircraft Company of Los Angeles, manufacturer of ram-jet and pulse-jet engines and electronic air-navigation and control devices; the Laboratory for Electronics, Inc. , of Boston, makers of cyclotron equipment, radar components, electric flight control and guidance systems; Airborne Instruments Laboratory, radar and electronic devices and target indicators; the Aircraft Radio Corporation, radar and other electronic instruments; Horizons, Inc. , engineering development and research and (Laurance alone) $1 million as of 1952 in the Glenn L. Martin aircraft enterprise. 15
Laurance, too, held an interest in Reaction Motors (21 per cent), Marquardt Aircraft (20 per cent), Wallace Aviation (27 per cent), Flight Refueling (30 per cent), Piasecki Helicopter (17 per cent), Airborne Instruments (24 per cent), Aircraft Radio (24 per cent), New York Airways (3 per cent), Horizons (5 per cent), and Nuclear Development Associates (17 per cent). 16
Four out of five of these ventures, said Fortune, were successful. 17
While the Rockefeller brothers clearly have decided to put a good part of their personal investments into the field of advanced technology, which may seem to them the wave of the investment future, some clue to their broader investment approach may be discerned in the portfolio of the Rockefeller Brothers Fund.
At the end of 1964 we find there $20,689,425 by market value of government and corporate bonds, $21,882,161 of corporate notes, $1,801,589 of preferred stocks and $161,608,512 of common stocks with a book or acquisition value of $88,157,570. The entire Fund was valued at $205,981,687.
Although the portfolio embraced a wide section of the investment spectrum, like any balanced investment fund, distinctive Rockefeller properties among the holdings were as follows:
Value
Shares Book Value Market
Standard Oil Co. (New Jersey)
$61,665,328
Standard Oil Co. of California
17,927,934
Socony Mobil Oil Co
18,340,825
Marathon Oil Co. ,
a Standard Oil unit
1,996,800
Chase Manhattan Bank
12,203,264
684,220
244,333
199,900
31,200
167,168
$30,422,352
10,388,607
8,482,656
1,074,958
6,949,897
All these stocks, naturally, represent corporate voting power which, in conjunction with other family holdings, represent still greater voting power. Additional smaller holdings were in Alcoa, AT&T, Armour, Bethlehem Steel, Chrysler, Du Pont, Eastman Kodak, Ford Motor, General Electric, General Motors, Great A&P, IBM, International Nickel, International Paper, National Cash Register, Polaroid, Sears, Roebuck, Texaco, etc. As indicated by this Fund, then, the Rockefellers: are diversified by investment throughout the American corporate structure.
Their private holdings presumably follow the same general line of distribution, although there may be differences of emphasis in different funds.
More recently at least, Laurance has had a large position in the Itek Corporation, formed in 1960 to concern itself with mechanical, electrical and electronic equipment and to develop optics with relation to photography and photocopying.
Some of these personal investments have been closed out. Where there has been a profit, the close-out required a capital gains tax of 25 per cent. These capital gains ventures of the Rockefellers are, in my opinion, on the basis of the theory of giving tax leniency to actual new ventures, fully justified and differ from capital gains leniency accorded buyers and sellers of stock and real estate in the open market, where there is not the shadow of any social contribution. Whether the brothers operate cyclically in the stock market, as their grandfather did over a broad spectrum, is not known, although the family Stock Exchange seat is still held.
The brothers, Morris reports, are "keenly interested" in making money but not by any means for the sake of mere possession or accumulation, only of "proving their ability. " 18 To them, he says, money is a mere tool with which to build. They don't like to talk about money, which by reason of constant allusion in their presence must surely be boring, but will redirect pecuniary conversations to value. Unlike lesser mortals they are in a position where they can do this on the basis of authentic impulse. Their biggest problem about money is no doubt that they have had dumped in their laps so much of what most other people desire.
Contrapuntal Enterprises
The Rockefeller Brothers Fund is a foundation enterprise run by the brothers and the largest in a flotilla of others including the General Education Board, the Rockefeller Foundation, the Laura Spelman Rockefeller Memorial and the like. Out of the General Education Board were financed the University of Chicago and many other educational enterprises in whole or in part, including many southern Negro colleges. The Rockefeller Foundation has been more broadly engaged in financing medical, scientific, cultural and other enterprises in vast profusion, a work the Rockefeller Brothers Fund is continuing.
There is, quite evidently, a counterpoint going far back into the history of John D. I between profit-making enterprises, originally subject to much public and judicial disapproval, and nonprofit-making enterprises that have earned wide public approval.
Anyone who does not like the way Rockefeller conducted his business affairs is, upon inquiring into his nonprofit or philanthropic enterprises, brought up short. Here the signals become crossed, as in the case of Pavlov's experiments with dogs. Original feelings of pain or disapproval are now followed by feelings of pleasure and approval. Then, as one sits back to enjoy the pleasure, one suddenly again feels a stab of pain. Observers are confused, perhaps like the Pavlovian dogs brought to a state of nervous breakdown or apathy.
There is room a-plenty here for feelings of ambivalence. Are the Rockefellers trying to improve the world? Or are they merely automatically milking it?
These questions, which reflect the Rockefellers as controversial figures, require some sort of answer. There are many persons who would blandly and patronizingly dismiss such thoughts as the product of a presumptuous writer's overheated imagination. If there were nothing to the negative side then, one should ask, why did Winthrop, who never hurt a fly, when he went to work in the Texas oil fields in 1933 find it necessary to have bodyguards and, when he returned in 1936, to get a permit to carry a gun for protection against "fanatics"? 19
Point Counter Point
The contrapuntal Rockefeller style of operation is shown by the more recent enterprise of the brothers in the international field, especially in Latin America and the Middle East but also, of all places, in Russia. Two organizations, Morris reports, were established by them as an "experiment in international cooperation. " One was the International Basic Economy Corporation (IBEC), originally started with $2 million in 1947 and soon capitalized at $10,824,000, "intended to help raise the standard of living in the localities involved--chiefly Latin America--and to return a profit, if possible, to the investors. " 20
Paralleling IBEC there was formed the American International Association for Economic and Social Development (AIA), with Nelson president of both at the inception. Because IBEC would be operating its profit enterprises in poor if not primitive areas, AIA would engage in providing health, education, research and credit facilities. AIA was nonprofit, Operations were begun in Brazil and Venezuela and later extended to other areas.
AIA put up Rockefeller funds but, following a settled Rockefeller policy, it involved others as well--at first various Venezuelan oil companies and the Corn Products Refining Company and later Pfizer Corporation do Brasil; Anderson, Clayton, Ltda; The Sulphur Institute; The Ford Foundation; and Price Waterhouse and Company. Then it called upon local governments to put up matching funds.
Since Morris reported on these enterprises they have grown, particularly in the profit area. IBEC as of 1965 had 9 plants in the United States and 135 stores in Latin America and 108 wholly or partially owned subsidiaries in various parts of the world. It had 297 common and 32 preferred stockholders and 10,090 employees. Its business included housing, retailing, credit and many other endeavors. Total assets at the end of 1965 were $142,227,662 and total sales $191,711,425. Profits for 1965 were $2,723,007. The president was R. S. Aldrich and one of the vice presidents was Rodman C. Rockefeller, Nelson's son. 21 This has manifestly become a big operation.
AIA in 1961 had total assets of $752,585, received gifts of $908,207 for the year and expended $937,444. 22
Early in 1967 it was announced (New York Times, January 16, 1967; 1:6-7) that IBEC was entering Russia and the Iron Curtain countries in a multi-billion-dollar operation. Joining 50-50 with Tower International, Inc. , of the Cleveland Cyrus Eaton interests, it
was announced that the joint enterprise would begin or complete already launched large hotels in Budapest, Belgrade, Warsaw, Prague, Sofia and Bucharest in a Rockefeller- Eaton version of an Iron Curtain Hilton chain. Also to be built were rubber plants in Russia costing considerably more than $200 million, a $50-million aluminum plant in Yugoslavia and a glass plant in Rumania. Highly profitable arrangements were announced to have been made in return for American financing and construction knowhow and can-do; materials, labor and sites would be supplied by the. Communist governments.
The entire deal was looked upon by the principals as the beginning of a highly useful "dialogue" between the capitalist West and the communist East, a really constructive thrust that can bring salvation to the ordinary run of mortals and, naturally, plenty of dollars to the promoters. Considering the stature of all the participants it was hard to see how the whole enterprise could fail to be a huge success.
These two ventures in the private development (exploitation? ) of undeveloped world regions show the general emphasis. The tax-free AIA clears the way; IBEC earns the profits. The profits of IBEC more than nourish AIA. All spells "development," international fraternization.
Almost from the very beginning the Rockefellers have followed a policy, wherever they could, of requiring that others be brought in with matching funds. In this way they have succeeded in involving a broader section of the community of wealth in any particular nonprofit enterprise.
Thus, when John D. Rockefeller put up the money to get the University of Chicago started, Marshall Field I, the department-store tycoon, was prevailed upon to provide the land, and many rich Chicagoans--Armours, Swifts, Fields and others--have from time to time contributed funds to the university. In this way the Rockefellers have been, to a large extent, bellwethers or pilots in the field of philanthropolity.
Before World War I, after Andrew Carnegie financed Abraham Flexner in a study of the medical schools that led to profound valuable reforms and the elimination of a large number of shabby diploma mills, it was decided to give the University of Rochester a medical school. Flexner approached George Eastman, the Rochester camera magnate, and explained that the cost would be $10 million. Eastman offered to put up $2. 5 million, which Flexner found inadequate. Eastman then sent word that he would put up $3. 5 million, to which Flexner is said to have replied: "That would make it a Rockefeller school, not yours. It must be yours. " Over this Eastman brooded for a few weeks and then called in Flexner, shaking his finger and shouting: "I'll put up five million--then I don't want ever to see your face again! " 23
Enter Frederick T. Gates
In this and many other instances the way was by no means smooth in cooperative money-raising. Nevertheless, this pattern of the Rockefellers, originally devised by Rockefeller's close adviser, Frederick T. Gates, head of the American Baptist Education Society, has been rather faithfully adhered to throughout. They try to put up no more than half the funds for any project.
How Rockefeller became acquainted with Gates, why he decided to make him his philanthropolic adviser, is a revealing story. Gates, a clergyman stationed in Minneapolis, was called upon by George A. Pillsbury, the flour king, to help draw up his will, by which he intended to leave several hundred thousand dollars to a Baptist school. Pillsbury decided to give immediately only $50,000 and leave them to raise a like amount, thus insuring their close supervision of the money. Then he would leave an amount in his will.
Gates succeeded in raising $60,000 additional for the Pillsbury
Academy and was thereupon made head of the Baptist Education Society, which had a plan for establishing a big university in Chicago or New York. In this guise he approached Rockefeller, a Baptist official, who invited him to pass a weekend with him, during which Gates did little talking.
The oil man became interested in him [says Morris] especially when he learned that Gates was acquainted with the Merritt family in Minneapolis which owned the vast Mesabi Range iron ore deposits. John D. knew that if he could buy Mesabi Range and develop it under the techniques he had developed in the oil business he could become the master of American steel and iron. Furthermore, the Merritts needed money.
Not long afterward Gates was instrumental in getting a large loan for the Merritts, who pledged the key railroad into the iron field as security. It was Rockefeller money, although the Merritts didn't know it, and in time John D. had the railroad, and forced the Merritt family to sell out to him at his own price. The steel men immediately took alarm when they saw the Mesabi Range fall into Rockefeller hands, but John D. apparently did not want a knockdown fight and he later leased the deposit to Carnegie for fifty years. 24
The Multifacet Style
This was back in the late 1880's and early 1890's. The way Rockefeller scooped up Gates and the ultra-juicy Mesabi Range and started planning for the University of Chicago well illustrates the Rockefeller and the higher finpolitan style. This style is multifaceted.
The essence of a finpolitan project is that it be multifaceted, that it have aspects of profound profitability interlaced with do-gooding, philanthropy and favorable publicity. It must seem constructive, statesmanlike. The philanthropic thrust qualifies and protects the profit-making thrust. For this reason, almost any Rockefeller or emulatory higher finpolitan endeavor is very much like a rich four-decker sandwich: One layer is Big Business, the next layer is obviously vaguely philanthropic or cultural-scientific, the third layer represents favorable notoriety stemming both from profitability and from philanthropy and the fourth layer and the first three layers in combination represent cultural, social, political and economic power. It all adds up to power.
In the case of the Rockefellers as of others of the wealthy, there are plenty of persons ready to dispute such suggestions. Thus, Professor Nevins, writing of the elder Rockefeller, says: "Unlike James B. Duke, he never for a moment mingled private commercial interests with philanthropic acts. " 25 1 have no interest whatever in asserting that Rockefeller did or did not mingle commercial and philanthropic acts; what is at stake is simple intellectual clarity with respect to facts. On the basis of abundant evidence that Nevins himself is obliged to scan, Rockefeller did mingle profit and nonprofit activities; it would have been difficult if not impossible to avoid doing so.
The chief instrumentality of this mingling was Gates himself.
As Gates has written, owing to public reports coming out about his great wealth, Rockefeller at the time began to be "hounded almost like a wild animal" by people soliciting funds for plausible and implausible causes. Many simply wanted personal handouts. 26 From this pressure he wanted to escape, and Gates, now in Rockefeller's employ, was the man to whom solicitors were sent for screening.
"It has been customary to treat Gates as a minister who developed an interest in education and philanthropy," says Nevins. "Actually, Gates was essentially a businessman with a talent for large affairs, a keen interest in the power of money, and a passion for seeing it expended with the greatest possible efficiency. He was, in short, a man after Rockefeller's own heart . . . he was also shrewd, alert, aggressive, and capable
of driving hard bargains. The time was not far distant when this former minister, coming to New York, would teach Wall Street itself some lessons. " 27
Subsequently Nevins notes, "The man whom Rockefeller thus selected as his principal aide in philanthropy was as remarkable as any of his partners in business. In sheer ability he matched Flagler, Rogers, and perhaps even Archbold . . . he possessed an unusual combination of gifts: insight, genuine imagination, analytical power, and vision, backed by unquenchable energy, courage, and an evangelistic fervor. . . . He was often impulsive and sometimes inconsistent. . . . At bottom, as we have said, he was a businessman rather than a minister or social worker, and he soon gained a reputation for cautious, adroit, and hard-headed conduct in business affairs. " 28
Gates, like many an underling, was as flinty as his master. At the time of the strike at the Colorado Fuel and Iron Company in 1913 (twenty-seven dead and two mines set on fire by desperate workers), Gates stood firmly against the strikers as Rockefeller, Jr. , relented. Both had been directors of the company of which John D. Rockefeller was II a major stockholder" (Fosdick); and L. M. Bowers, the chairman, was the uncle of Gates.
Characterizing the strikers as "desperate and lawless," waging "organized and deliberate war on society," Gates said, "The officers of the Colorado Fuel and Iron Company are standing between the country and chaos, anarchy, proscription and confiscation, and in so doing are worthy of the support of every man who loves his country. " 29 Actually, the strikers had been maddened with ill treatment. According to John T. Flynn, a biographer who presents a less genteel Rockefeller than Nevins, "When Henry C. Frick shocked the country by shooting down ruthlessly the striking iron workers at Homestead, John D. Rockefeller wrote him a letter approving his course and expressing sympathy. " 30 Gates and the elder Rockefeller saw pretty much eye to eye.
So talented did Rockefeller quickly find Gates that "Inevitably, Gates was soon looking after Rockefeller's investments as well as his philanthropies. " 31
Although the Standard Oil Trust absorbed all of Rockefeller's time and energy, he had nevertheless already made extensive diversified investments--in mines, steel mills, paper mills, a nail factory, railroads, lumbering, smelting properties and the like. 32 On some of these he had been stuck, through bad advice; others were not being operated properly. Gates was sent on tours of the country to look into the properties underlying the entire investment portfolio. He reported back to Rockefeller on what he found, not always favorably. Then he was given carte blanche to reorganize, revise and to bring order out of chaos.
Gates stepped into a dual role as the first director of the Rockefeller philanthropic activities and as investment manager, and he was equally good in both roles. 33
Beyond this the clergyman-humanitarian became a rabid and successful Wall Street speculator for his own account and an officer of various Rockefeller companies, notably the head of the Lake Superior Iron Ore Company. "Nothing could be stranger than the spectacle of this impecunious Baptist preacher setting out to raise funds for a religious college and winding up in a few years as the president of an iron mine and ore railroad company worth twenty millions, and finally the almoner of America's greatest multimillionaire, with the power of the purse over these vast treasures. " 34
For his role in negotiating the sale of Rockefeller ore properties to the embryo United States Steel Corporation, Gates resolutely demanded and received a commission from Rockefeller. 35 Gates had some idea of his worth in cash value.
Such being the case, the meaning of a statement is baffling when it indicates that Rockefeller never mingled philanthropy and business. There was such mingling in still
further degree when he established endowments with Standard Oil stock, all of which carried company voting power.
What became the "Rockefeller style," then, was apparently not something reasoned out in advance. Gates and Rockefeller played everything "by ear," and the style slowly evolved. But from the moment Gates joined Rockefeller formally in 1891, both the philanthropies and the satellite investments were carefully thought about and supervised by Gates while Rockefeller tuned Standard Oil up to concert pitch. In the course of time the contrapuntal role of Gates took Standard Oil into its sweep and is well exemplified today in IBEC, AIA and other new Rockefeller enterprises.
Division of World Emphasis
Just as the brothers have evolved a division of labor among types of activities so, too, have they evidently (perhaps unconsciously) divided the world into spheres of individual influence. Latin America, where Nelson has a Venezuelan ranch, appears to be his particular domain; his son, thus, is a high official of IBEC. The Orient is the particular domain of John D. III. All . areas are under the supervision of David as the head of a bank with more than 200 world branches. Laurance seems pointed toward Africa. 'Only Europe does not yet seem spoken for.
The chief chairmanships and directorships show the special orientations of interest.
John D. 111, chairman of the Rockefeller Foundation, the General Education Board, the national council of the United Negro College Fund, was also as of 1966 a trustee of Princeton University, Harvard-Yenching Institute and chairman of Products of Asia, Inc. , Products of India, Inc. , and president of the Japan Society, Inc. , and the Asia Society, Inc. He was a lieutenant commander in the United States Naval Reserve during World War 11, special assistant to the under secretary of the Navy late in 1945, and
was a consultant of the Dulles Mission to Japan on the peace settlement in 1951 and a U. S. delegate to the Japanese peace treaty conference in San Francisco in 1951. He holds the following decorations: Order of Auspicious Star of China (Kuomintang), Order of the British Empire, Grand Cordon of the Order of the Sacred Treasure of Japan, Grand Cordon of the Star of Ethiopia, Most Exalted Order of the White Elephant of Thailand and Commander of the Ordre des Millions d'Elephants et du Parasol Blanc of Laos.
Now, whatever else this worthy man is, taking into consideration many other directorships, trusteeships and chairmanships, he is more than an ordinary citizen with one vote at the polls. He is, also, manifestly more than a wealthy man. He is a finpol, intermeshing between governments, industries and cultural institutions.
"Because of their many friendships with missionaries, the Rockefellers had [as early as 1914] taken a keen interest in China," says Nevins. 36 There were others who churlishly believed the keen interest of the pecuniary wizard of Standard Oil related more to the fact that China was a huge market outlet for kerosene, of which Standard was then almost the sole supplier.
The Rockefellers were, at any rate, keenly interested in China, as they are now, without missionaries, interested in all of the Orient from Japan to India, where Standard Oil at least incidentally has large interests, and the General Education Board put up money to establish the China Medical Board and to build Peking Union Medical College. Up to 1952, Nevins says, the Foundation had put some $45 million into westernizing Chinese medicine, science and education. More recently, as the Communists took over China, the Rockefellers shifted Asiatic emphasis to Japan, India and other areas.
Nelson Rockefeller, three-time governor of New York, premier state of the Union, was president of Rockefeller Center from 1938 to 1945 and chairman from 1945 to 1953 and 1956 to 1958; Federal Coordinator of International American Affairs, 1940- 44; Assistant Secretary of State, 1944-45; chairman of the International Development Advisory Board (Point Four), 1950-51; Special Assistant to the President of the United States, 1954-55; Under-Secretary of Health, Education and Welfare (HEW), 1953-54 and has at various times (when not helping run the government) been or remains director or trustee of various foundations, museums and organizations. A Phi Beta Kappan, he holds the Order of Merit of Chile, the National Order of the Southern Cross of Brazil and the Order of the Aztec Eagle of Mexico. Here, again, is no common person, no ordinary wealthy man, no run-of-the-mill politician. This is a finpol, a very wealthy man with an interlacing of high governmental and cultural points d'appui.
David Rockefeller, chairman of The Chase Manhattan Bank, worked his way quickly up through various jobs in the bank and is also chairman of The Chase International Investment Corporation, chairman of Morningside Heights, Inc. , a big housing development, and a director of B. F. Goodrich Company, Rockefeller Brothers, Inc. , and the vast Equitable Life Assurance Society. He was an army captain in World War II, is a director and trustee of various Rockefeller foundations and museums, and is an overseer of Harvard University, of which he is an alumnus. He holds a Ph. D. from the University of Chicago. He also holds the French Legion of Honor and the Legion of Merit. In 1940 he published Unused Resources and Economic Waste. Here again is a high personage, far from an ordinary citizen.
Laurance Rockefeller is a similar type of Higher Organization Man. He is chairman of Rockefeller Brothers, Inc. , Caneel Bay Plantation, Inc. , Rockefeller Center, Inc. , and director of Filatures et Tissages Africains (Africa and the Caribbean are apparently his particular domains), Cape of Good Hope Corporation, Dorado Beach Hotel Corporation, president and trustee of Rockefeller Brothers Fund and trustee of the Conservation Foundation, chairman of the New York State Council of Parks, member of the corporation of Massachusetts Institute of Technology, a trustee of the YWCA, director of the American Committee of International Wildlife Protection, director of Resources of the Future, director of the American Planning and Civic Association and of the Hudson River Conservation Society, commissioner and vice president of the Palisades Interstate Park Commission, trustee and president of Jackson Hole Preserve, Inc. , trustee of the Alfred P. Sloan Foundation, chairman of the Memorial Sloan- Kettering Cancer Center, trustee and vice president of Sealantic Fund, trustee and president of the American Conservation Association, trustee and vice president of the New York Zoological Society and director, trustee or officer of various other bodies. He is a Commandeur de L'Ordre Royal du Lion, Belgium, recipient of the Conservation Service award of the U. S. Department of Agriculture and of its Special Conservation award and a holder of the Horace Marder Albright Scenic Preservation medal. A lieutenant commander during World War II, he is a member of the Naval Air Reserve.
Winthrop trails somewhat in this august procession but is coming abreast fast via politics. Governor of Arkansas, he is also chairman of IBEC Housing Corporation and Winrock Enterprises, Inc. , conducting vast agricultural and cattle-raising enterprises in Arkansas; a director of the Union National Bank of Little Rock, Rockefeller Brothers, Inc. , and Rockefeller Center, Inc. ; a trustee of Industrial Relations Counsellors; chairman of the board of Colonial Williamsburg, Inc. , and Williamsburg Restoration, Inc. ; chairman of the Arkansas Industrial Development Commission; trustee of the National Urban League, Rockefeller Brothers Fund and the National Fund for Medical Education. Since 1953 he has resided in Arkansas.
Among them all they cover a great deal of ground. As anyone can see, they are community-minded, but on an international scale that gives this term a new dimension. The world is their plantation.
The Foundation Thrust
Total outlays for philanthropic or nonprofit enterprises by the founder of Standard Oil are put by Raymond B. Fosdick at $446,719,371. 22 capital sum and income therefrom of $850 million--in all well over a billion dollars. 37 Most of the income was expended in the form of grants, except in the case of Rockefeller Institute.
The capital sums were allocated as follows:
Rockefeller Institute for Medical Research, 1902
(now Rockefeller University)
General Education Board, 1902
The Rockefeller Foundation, 1913
Laura Spelman Rockefeller Memorial, 1918-28
Total
$ 60,673,409. 45
129,209,167. 10
182,851,480. 90
73,985,313. 77
$446,719,371. 22
In recent years the capital funds of the General Education Board have been drawn down steeply for grants in the neglected field of education and the Laura Spelman Rockefeller Memorial was merged in 1928 with the Foundation. Funds for the University of Chicago came largely through the General Education Board. Coming up in place of the General Education Board has been the Rockefeller Brothers Fund.
Up to 1950 external grants by income and principal were as follows: 38
Rockefeller Foundation
From income
From principal
Total
General Education Board
From income
From principal
$325,754,751. 35
$125,773,613. 93
$451,528,365. 28
$132,339,912. 86
$164,427,148. 34
Total
Laura Spelman Rockefeller Memorial
From income
From principal
Total
International Education Board
From income
From principal
Total
$296,767,061. 20
$ 27,839,809. 74
$ 27,500,000. 00
$ 55,339,809. 74
$ 6,495,807. 82
$ 11,837,482. 00
$ 18,333,289. 82
$821,968,526. 04*
Grand Total
*Here should be added $60,673,409. 45 for Rockefeller University.
The International Education Board was established by John D. Rockefeller, Jr. , in 1923 but, in a very real sense, all the Rockefeller moneys are derived from the founder because nobody in the family since him has been a fortune-builder or even a conspicuous moneymaker. The grandsons have enterprises under way that appear likely to become highly profitable but not on any scale, as far as appears to date, resembling the original Standard Oil, the real honey-pie.
What remained of these funds at the end of 1950 was as follows:
Rockefeller Foundation $158,103,332. 13 39
General Education Board $ 24,624,493. 01 40
Rockefeller Brothers Fund (as of 1955) $ 59,663,273. 62 41
Total $242,391,098. 76
Of the moneys in the Rockefeller Brothers Fund the late John D. Rockefeller, Jr. , contributed $58 million in 1951 and bequeathed to it half of his estate. Reflecting part of this bequest in the amount of $65 million, at the end of 1960 the Fund showed total assets of $116,173,369. 42 Appreciation since then, as already shown, has been great.
Since 1950, of course, these funds have been generating more income, most of which has been allocated in the form of grants.
It is clear, then, that a truly stupendous sum was directed from the fortune of a single individual into various medical, educational, scientific and general cultural projects, both in the United States and abroad. As most of these moneys consisted of dollars of much greater purchasing power than the present dollar, it is evident that in dollars of current value the disbursements were of far greater weight.
That all this was part of a far-reaching plan is denied by spokesmen for the family such as Professor Nevins and Raymond B. Fosdick. To the charge of critics that the benefactions were established as "a shield against public censure," or, as some charged, "conscience money," Fosdick, following Nevins, points out that Rockefeller in his 'teens, as a pious Baptist, was already giving to the church as much as 6 per cent of his earnings. He kept a meticulous record down through the years of all such gifts, which amounted to more than $1,000 annually by 1865 and to nearly $6,000 by 1869--goodly sums in those days. He gave $558. 42 in a lump to Denison University, for example, in the late 1860's. 43
Rockefeller, in other words, gave money all along, even as he saved and acquired it, and, as it appears in the Fosdick-Nevins accounts, merely stepped up the rate when he became very wealthy. Yet, that there was more to it than a mere continuation of charitable giving, is shown when these writers quote Gates.
Mr. Rockefeller, a prudent man, apparently showed some doubt at first about proposals of large-scale largesse, if such it was. Says Fosdick:
"Mr. Gates, who could never be anything but candid and forthright, used to thunder at the elder Rockefeller, 'Your fortune is rolling up, rolling up like an avalanche! You must keep up with it! You must distribute it faster than it grows! If you do not, it will crush you and your children and your children's children.
